Owner News 1/6/2017

We have discovered that issuing owners “preliminary 1099s” enables us to avoid drama when we actually issue 1099s in the mail. Our objective is to get you those numbers by January 10th starting with closed out properties next week. You will have until January 25th to dispute that information. If you have issues with the 1099 that arrives in the mail, it will cost you $150 to generate a new one.

Expenses

As you know, we have changed software applications. We did that at the near the end of this year so we can have a “clean” set of expenses in 2017. The reports generated by Appfolio are far superior to what we have been using in the past. 2016 will be a little confusing as you will be getting 2 sets of expenses. One set will cover from 1/1/1026 until 10/31/2016 and the second set will be November and December of this year. You will get that delivered along with your preliminary 1099s. Details of those expenses can be found in your dropbox folder. If you do not have access to dropbox, please ask your property manager to hook you up. If all that is gobbley gook to you, feel free to have your book keeper / accountant contact Liza (liza1468@hotmail.com).

TIP: Share your dropbox folder with your accountant.

Dropbox

We will eventually faze out Dropbox as Appfolio offers the same features and is less confusing for owners. Your files will remain there until about the end of 2018. We will send you a reminder then to get what you need before it’s shut down.

The 2 biggest benefits to changing software is that we have eliminated “unclaimed deposits” from renters and the reporting features for owners are much better. If you do not have your portal set up to see your property, please contact us immediately. This is where all your stuff is going to be next year.

Building Remodel

We remodeled the exterior of the building and repaved our parking lot. Why did spend all that money for improvements? It’s been a challenge recruiting talented property managers and agents with the shape it was in. Now we are not embarrassed to meet with potential agents. Talented property managers are the key to making our investors more money. In case you don’t know who everyone is, this our current team.

Jim’s Responsibilities

He will be distributing more of his properties to other managers. Liza will be doing all his remaining owner reconciliations at the end of the month. This will enable him to focus on improving business systems, recruting / training agents and growing the business.

Investing in 2017

With real estate prices rising in all the market segments of Las Vegas, it’s even more difficult to find a decent return on cash. Single family properties have risen in price by as much as 50% from the bottom of the market while rents have remained relatively flat. This page has some numbers for you to chew on. By using some real numbers among a range of property types, here is what we are recommending for 2017.

Type

Avg ROI*

Appreciation*

Retail

7%

9%

These mom and pop strip malls in “E” neighborhoods are undervalued. We highly recommend these. Unfortunately, it’s a a very steep entry. They start close to $1M.

SFR /LO

6%

5%

Year after year, these lease/options perform well when tenants do not exercise their option to purchase. Even if tenants do exercise their option, the real estate fees saved by investors make investors more money in the long run.

SFR Rental

2%

5%

For investors who want to hold on to their property for the long run, this isn’t too bad. We are still crunching the numbers on our Airbnb solution. Early predictions show ROI can be as much as 5%.

Multi Fam

3%

7%

The challenge we are having here is the unpredictability of returns. Some of our multi family properties print cash while others are bleeding investors to death. We get random large expenses that are impossible to predict. One bad tenant can ruin an entire building. We will not manage any of these after 6/1/2017. If you currently own one, you will be asked to sell it or let us refer you to someone.

*Average ROI – This is using today’s value of a property. Not the good old days when prices were about half that.

*Appreciation Predictions – Jim has been consistently conservative in his predictions and many of his investors have been very happy with the results.

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